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FS Investment II subsidiary obtains $200 million revolver with Citi
By Toni Weeks
San Luis Obispo, Calif., March 28 - FS Investment Corp. II's special-purpose financing subsidiary, Cooper River LLC, arranged a $200 million revolving credit facility with Citibank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission. The facility is due March 27, 2016.
Cooper River's obligations under the credit facility, which are non-recourse to FSIC II, are secured by a first-priority security interest in substantially all of Cooper River's assets, including its portfolio of debt securities.
Borrowings bear interest at Libor plus 175 basis points for the first two years, with the margin increasing to 200 bps after that. Cooper River will be required to pay a non-usage fee beginning June 24, 2013.
As part of the agreement, FSIC II may contribute cash or debt securities to Cooper River from time to time and will either retain a residual interest in any contributed assets or will receive fair market value for any debt securities sold to Cooper River.
Borrowings under the facility are subject to compliance with an equity coverage ratio with respect to the current value of Cooper River's portfolio and a loan compliance test with respect to the initial acquisition of each debt security in its portfolio.
In connection with the credit facility, Cooper River paid $65.1 million to acquire certain debt securities through the acquisition of Cooper River CBNA Loan Funding LLC, an affiliate of Citibank. The acquisition was funded with a $14.2 million draw under the credit facility and a $52.5 million cash contribution made by FSIC II.
Philadelphia-based FSIC II is the investment adviser for Cooper River's portfolio of debt securities.
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